Marketing Of Banking Services 1 5986t

MARKETING OF BANKING SERVICES. 1. Introduction.  Bank Marketing.  Why Bank Marketing.  Features of Bank Marketing.  Services.  Characteristics of Services.  Difference between Product and Services.

2. Marketing.  Features.  Marketing of Tools and Techniques.  Marketing Mix in Banking.  Growth of Service Market.  Marketing Approach in Banks. 3. Justification for Marketing the Banking Services.  Satisfaction of Customer Needs.  Bank Marketing in the Indian Perspective. 4. Articles.  Summary  Conclusion.

Shyamji Mehrotra. A Marketing person without adequate marketing skills will destroy sales instead of increasing it.Marketing of financial products need not only selling skills, but adequate knowledge about banking world also. A good salesperson require right soft skills like positive attitude, good communication etc. “Nothing happens in a company unless a product or services is sold, Everything else is cost.”

1

Introduction. The ongoing process of economic reforms has completely changed the operational environment for the whole banking industry in the country. Banks are now required to cope with stiff competition in business and also the complex regulatory norms regarding capital adequacy and provisioning. Banks are forced to adopt various marketing techniques and approaches. Thus, marketing has become imperative for all banks including those in the public sector. Marketing in banks can be stated as a new phenomenon that is shaping well over the past one decade. Public sector bank hardly considered marketing as a tool for business. The competition, deregulation that followed the reforms has changed the environment for banks, where marketing has occupied the place in the business of banks. Today, marketing in the banking industry is characterized by many innovations in products and services, use of advanced technology in product design, up gradation of delivery system, advertising and sales promotion activities, whether in public sector or private sector. Banks now have a firm that marketing strategies alone can brighten the future of banking business. Marketing in banks has become synonymous with customer and banks are found engaged in several activities of discovering, creating and satisfaction customer needs. Indian banking is at cross roads today. With the deregulation and liberalization process in full swing, the consequent policy changes introduced in the Indian financial system in general and banking in particular are effecting unprecedented changes in its functioning. With the emerging changes did spring up new challenges of commercial viability, cost effectiveness, effective marketing strategy, etc.Market oriented policies also gave birth to new players like foreign and private sector banks and subsidiaries offering varied high tech and cost effective Service. There was an absolute shift from sellers into buyers’ market, establishing the ‘consumer’ as the key factor in the market. The dictum “as the bank exists because of its customers, has become more pronounced and relevant in the present context”. Thus, marketing constitutes the key strategy for banks to retain good customers and also anticipate their future demands.

2

Bank marketing. Deryk Weyer of Barclays Bank call it “a process, consisting of identifying the most profitable markets now and in future; assessing the present and the future needs of the customers; setting business development goals and making plans to meet them; and managing various services and promoting them to achieve the plans – all in the context of a changing environment in the market”.

Why Bank Marketing? Awareness among Customers Modern technology has made customers aware of the developments in the economic environment, which includes the financial system. Financial needs of the customers have grown multifold into various forms like quick cash accessibility, money transfer, asset security, increased return on surplus funds, financial advice, deferred payments etc. With a wide network of branches, even in a dissimilar banking scenario, customers expect the banks to offer a more and better service to match their demands and this has compelled banks to take up marketing in right earnest. Quality as a Key Factor With the opening up of the economy, fast change has been experienced in every activity, and banking has been no exemption. Quality is the watchword in the competitive world, which is market driven and banks have had to face up to this emerging scenario. In fact, it may not be out of place to reiterate that quality will in future be the sole determinant of successful banking ventures and marketing has to focus on this most crucial need of the hour. Growing Competition Increased completion is being faced by the Indian banking industry from within the system with other agencies both, local and foreign, offering value added services. Competition is no more confined to resource mobilization but also to lending and other areas of banking activity. The foreign commercial bank with their superior technology, speed in operations and imaginative positioning of their services has also provided the necessary impetus to the Indian banks to innovate and complete in the market place. Technological Advances

3

Technological innovation has resulted in financial product development especially in the international and investment banking areas. The western experience has demonstrated that technology has not only made execution of work faster but has also resulted in greater availability of manpower for customer .

Marketing Approach in Banks. With the need for marketing in banks having evolved out of the changing environment and constant interplay of various interdependent factors, the importance of a systematic approach to marketing cannot be overstressed. The application of a marketing approach in banks will therefore involve: a. Identifying customers’ financial needs and wants; b. Developing appropriate banking services to meet these needs; c. Pricing for the services so developed; d. Setting up suitable outsells / banks branches; e. Advertising to promote the services to the existing as well as prospective customers.

Features of Bank Marketing.  Banking product cannot be seen or touched like manufactured products (intangibility)  In marketing banking products, the product and the seller are in separable; they together define the banking product (inseparability)  Banking products are products and delivered at the same time; they cannot be stored and inspected before delivering’ (perishability)  Standardization of banking product is difficult (variability)

4

Conclusion It is submitted that the banking system is on the threshold of a momentous era of change and continuity in growth and development, of individual customer needs and corporate practices, technology and competitions. The role of marketing in the banking industry continues to change. For many years the primary focus of bank marketing was public returns. Then the focus shifted to advertising and sales promotion. That was followed by a focus on the development of a sales culture. Now the focus is on the individual customer meeting and even anticipating his or needs and developing trusting, long-term relationships by delivering high quality personalized service. Marketing both as a philosophy and an activity; is expected to contribute immensely to the realization of goals both immediate and future. All though all the elements of the marketing concept – customer satisfaction, profit integrated framework and social responsibility must receive the greatest emphasis in the years a head. They must be guided by the dictum of Mahatma Gandhi. “A customer is the most important visitor in our promises. He is most dependent on us. We are depending on him. He is not an interruption on our work. He is the purpose of it. He is not an outsider on our business. He is part of it. We are not doing him a favour by serving him. He is doing as a favour by giving as an opportunity”.

5

PRIMARY DATA. 1.What

are the new products you would be launching?  Some of the new products we are launching are: wave guide for communication application; wave guide for satellite application; miniature pneumatic cylinder barrels; and refrigeration and air conditioning condenser tubes.

2.

India is a huge country. How do you service the all India market?  We have 14 Business Partners (agents) all over India. We invite all our

Business Partners once in a year to our plant to interact with production and marketing people and brief them about development taken place during the year. 3.

What is the market size of DTH service in India?  India has 13.09 million Direct to Home subscribers as of March 2009

according to link#1 which has TRAI as reference. TRAI (The Telecommunications Regulatory Authority of India) press release (Link#2) seems to be broken, it should give you the company wise numbers else you can check the corporate site/press releases of each provider to come up with a ball park figure.

4. What

can you do that your competitors cannot?

 This is good to know because it speaks to the defensibility and value of the company. Life is challenging for a company that has undistinguished products and services. This doesn’t mean the company will fail, but it has to be “special” in some way soon. 5.

Who are your investors?  Hopefully, there are one or two well-known venture capitalists. However, a perfectly acceptable—and perhaps even better—answer is that there are no investors other than the founders, and the plan is to

6

bootstrap the company as long as possible. These days revenue is the best source of capital. 6. Who

is on your board of directors?

 If there are outside investors, they are likely to be on the board. That’s cool. But you should beware of boards that are only the founders and their family and friends. You need at least one “adult” on board who can be the hardass bull shiitak detector. 7. Assume

that you have $0 for marketing, how would you market the

product?  Any bozo can market a product with a million dollars. What you want is a team that can (a) make a great product that markets itself and (b) catalyze people to believe in the product enough to market it for you. If the answer you get is, “When we’re ready to ship, we’ll raise more money to market it,” you should run for the door. 15. Promotion in Marketing means— (A) ing an examination (B) elevation from one grade to another (C) selling the products through various means (D) selling the product in specific areas (E) None of these Ans : (C)

21. Market Expansion means— (A) hiring more staff (B) firing more staff (C) buying more products (D) buying more companies (E) None of these Ans : (E)

7

23. Effective marketing helps in— (A) developing new products (B) creating a competitive environment (C) building demand for products (D) All of these (E) None of these Ans : (D) 26. Delivery Channel means— (A) maternity wards (B) handing over the products to the buyers (C) places where products are made available to the buyers (D) All of these (E) None of these Ans : (C)

29. Innovation mean— (A) Product Deg (B) New ideas (C) Impulse (D) Both (A) and (B) (E) None of these Ans : (D) 30. One of the following is a target group for the marketing of educational loan. (A) All the customers (B) Students (C) Only poor students (D) Students having promising educational track record (E) All of these Ans : (B) 31. Service after sale is not the function of— (A) Marketing staff (B) Seller (C) Director of the company (D) Employees of the company (E) All of the above are wrong 8

Ans : (A) 32. If done through………the rural marketing would be more effective. (A) fairs (B) village fairs (C) door to door campaign (D) All of these (E) None of these Ans : (B) 33. Market Survey means— (A) Market Research (B) Market Planning (C) Marketing Strategies (D) Market Monitering (E) All of these Ans : (A) 34. ………can be done through digital Banking? (A) Mobile phone (B) Internet (C) Telephone (D) All of these (E) None of these Ans: (A)

35. A good seller should have the following quality/qualities? (A) Devotion to the work (B) Submissive (C) Sympathy (D) All of these (E) None of these Ans: (D) 36. The rural marketing is not required because— (A) rural people do not understand marketing (B) its not practical from the cost point of view (C) it is sheer wastage of time (D) All are wrong 9

(E) All are correct Ans : (D) 37. Planned-cost service means— (A) Costly products (B) Extra profit on the same cost (C) Extra work by seller (D) All of these (E) None of these Ans : (B) 39. The aim of successful marketing is— (A) to increase the sale (B) to increase the profit (C) to increase the output of sellers (D) All of these (E) None of these Ans : (D)

10

11